Visit our Substack for more: https://www.overlookedalpha.com<br /><br />There is no doubt that the consumer taste changes over time and plant-based meat is becoming more popular. Beyond Meat is a plant-based meat company to go public back in May 2019. Its share price has had a lot of fluctuation, reaching a high of over $230/share within 2 months of the IPO. Today, its share price is around $18/share, representing a drop of over 90% from its all-time high. <br /><br />To better understand this, it is best to look at the financials.<br />Although it was founded back in 2009, Beyond Meat is yet to reach profitability. There are a couple of red flags that are worth discussing:<br /><br />Gross margin decreases for 3rd year in a row and is now negative<br /><br />This means it costs Beyond Meat more to manufacture a product than they get paid for. One of the ways to significantly improve this is to increase production volume, which would reduce the cost per product.<br /><br />However, that doesn’t seem to be going well. In an environment with high inflation, the revenue in 2022 was almost 10% lower than it was in 2021.<br /><br />The loss from operations in 2022 was $343 million, which is over 80% of the revenue! This is primarily caused by the high SG&A expenses of almost $240m for 2022 (increased compared to the 2021 amount of $209m).<br /><br />The company has a total debt position (including leases) of almost $1.2 billion with $310 million in cash.<br /><br />All of this combined, begs the question, can Beyond Meat finds its way to profitability on time, or is the company on a highway to bankruptcy?
